Posted by: islamicfinancingnews | August 6, 2013

Choosing the right Islamic mortgages

islam4 Whether you’re shopping for Islamic mortgages free from Riba or one of the more conventional types of mortgages to purchase your first home or refinance, you need to learn some mortgage basics. That includes the difference between a fixed rate and variable rate mortgage, as well as the different terms that apply to whichever mortgage product you select.

Life is full of surprises and generally you want to make sure the mortgage you choose has some flexibility. For example, you could come into some extra money through an inheritance, an unexpected raise at work, or a substantial tax refund and you want the flexibility that allows for pre-payment options such as increasing your mortgage payment or making a lump sum payment without penalty.

Talking about your financial plans with a lender can help to determine the type of mortgage you can afford and the length of the mortgage to suit your needs. A couple with plans to start a family or save for a child’s education may be looking at lower monthly payments over a longer term than someone closer to retirement age who wants to pay off a mortgage quicker.

It’s important to talk about your financial goals with an Islamic finance lender who can work with you to suggest a Sharia compliant mortgage product and payment schedule to meet your requirements.

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